SAP Software: The Great Enabler

of Wawa’s Transformation

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1803 to 2008
 • Privately held
• $6 billion in revenue
• 570 stores in mid-
Atlantic
– PA to VA
• 16,000 associates
• 4th generation
business
– Foundry, Mill
– Dairy, Markets
• Today, 3 distinct
businesses under one
roof

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 High Volume Foodservice

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 High Volume Convenience

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 High Volume Gasoline

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 Our Core Ideology
• Convenience is
doing well
– Everyone wants a
piece

• FIQE is
aspirational

• Economic Engine is
rusty

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 Economic Engine is Rusty
• Customer count is down
• Growth is flat
• Key drivers have slowed
– Cigarettes, Coffee, ATM
• Costs are rising faster
than gross profit
• Infrastructure costs are
too high

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 Competition is “Heating” Up
• New emerging competition
• Low barrier to entry
• Low cost structures
– real estate, operating, people

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 The Challenge

• Integrate three business segments

• Compete with low cost competitors

The Change
Process Centricity

Process Centricity
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 Process Centricity
• The journey continues with SAP

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 The Scope of N-Zone encompassed the
following functionality and involved 100 Wawa
Associates and 35 SAP consultants

ƒ ERP 2005 -- A/P, A/R, G/L, Treasury, controlling, Fixed assets,

Procurement and Project Systems
ƒ SRS – Store Retail System
ƒ Handheld Solution -- Select Retail Store Transactions
ƒ POSDM – POS Data Management
ƒ Space Management – JDA Intactics
ƒ Netweaver 7.0 (2004s) – Enterprise Portal, XI and BW
ƒ SCM – Advanced Forecasting and Replenishment
ƒ MAP – Merchandise Assortment Planning for budgeting
ƒ SAP Solution Manager

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 N-Zone Program Time Line

ƒ Project Prep May 2005

ƒ Project Blueprint (Financials & Retail) October 2005
ƒ Project Realization April 2006
ƒ Project Go-Live (Financials) May 2006
ƒ Project Pilot (Retail 55 stores) September 2006
ƒ Project Go-Live (Retail) June 2007 – December 2007
ƒ Mainstreamed Support March 2008

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 The Burning Platform -
Implement SAP to Prime
our Economic Engine
Challenges Process Capabilities
Integrate Three • Less time ordering
Core Ideology Business Segments due to Forecasting
(Enable Managers to and Replenishment
Focus on the (F&R)
Customer) • Streamlined
perpetual inventory
processes

Compete with Low • Cost Accounting –

Cost Competitors true cost by article,
(Better Understanding accurate margin
of the Business) calculations
• One Version of the
Truth – one reporting
system for Store
Operations and
Marketing
Compete with Low • Space Mgt.
Cost Competitors • Promotions Mgt.
(Retailing Capabilities)

Drive out Costs • Centralize

Procurement
• Control Spend

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 Benefits Achieved - richer data has enabled improvements in
three key areas

„ Improved understanding of the Business

• Foodservice portioning
• Wawa branded nut distribution
• Inventory process - increased visibility & awareness
„ Improved Decision Making and Focus
• Focus on shrink and spoilage at category / item level
• Loss Prevention
„ Improved processes
• Leveraging F&R – holiday film & batteries, beverages
• Leveraging JDA – Distribution compliance, Real-time floor plans and
plan-o-grams
• Leveraging SAP – Tobacco allocations, Promotions Capabilities, paying
off the database
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 Our Focus is to leverage data in SAP to improve decision
making

Wawa
Positioning Enterprise Performance Management
Metrics, Strategy and Goals
Determine if we on target to achieve strategy
Strategic
Future

Leverage Data to Make Decisions

Looking at data over time to
identify trends in specific areas to improve
Analytical performance and financial results

Build Trust in the System

Today

Transactional Validation of system inputs and

outputs, reporting transactions

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 Our BW Governance Model has enterprise focus to
maximize resources
Role
Exec Information Owners • Ensure process is followed
• Break Ties
Chris Gheysens & • Ensure focus on highest
Neil McCarthy value work
• Right technology tools

IT Build Function
Consists of Project
Managers for ABAP &
BW
Role
• Manage resources that are
shared among multiple
departments requests
• Define toolkit and template
standards
IT Relationship Managers and Functional SuperUsers
Role
Steering Committee • Lead by Finance
Requests
Cross functional Director • Validates business
Level Group Consisting of value of requests
Scoped Requests Finance, Marketing, Ops, • Ensures work is not
duplicated
Status & Workload S/C, IT
• Sets priority of work
Prioritized Requests
Role
• Complete request templates
• Validate BW / ABAP /
queries

Undefined Requests - BW / ABAP / Query

Store Supply
Finance Marketing
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 Benefit Measurement Approach –
Re-Think Business Case

Cost
Foodservice Key Deliverables
Management
Management
$33.3 Million •Value Maps
$21.0 Million
Store Order
•Process Metrics
Management
Cycle •Benefit Scorecards
$10.6 Million
Category
Management Information
$31.7 Million Management Project Scope
$11.3 Million •Revenue Optimization
Original Benefit $107.9 Million •Space & Assortment Optimization
•Out of Stocks
•Direct Product Profitability (DPP)

Today’s
Knowledge
Applied

Near Future
Value Engineering defines new
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 Work in Progress to define new activities and value
„ Assortment Optimization
• Define a process for category clustering & assortments
• Improve assortment rationalization
„ Space Optimization
• Deploy system supported floor plans to drive GP
• Optimize store design by integrating POG and space learning's into Real
Estate and Asset Mgt. processes
„ Implementing “One Version of Truth” to make data actionable
– DPP
– Sales Units / Hour
– Dynamic Margin Analysis
– Market Basket Reporting
– Competitive Analysis
„ Managing discontinued inventory more efficiently
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 The Role of the CEO

• Transform the Culture

– Re-orient Leaders – empower executives to change the status
quo and mobilize the organization to become process centric
• Define the Playing Field
– Face the brutal facts – ensure that everyone see’s the current
problems and opportunities
• Set the Course
– Gain Alignment – align strategies and programs to attack the
problems
• Mobilize the Organization
– Prophet – Advocate process to the organization
• Mainstream a new way of thinking

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 SA eat er
G r a bl

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